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The following is a summary of accounts receivable at December
31 (in millions):
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| The Company’s receivables securitization facility (“Receivables
Securitization”) in the amount of $175 million provides
for the sale, on a revolving basis, of certain of the accounts
receivable of Fisher Scientific International Inc., a Delaware
corporation (“FSII”), to a special purpose, bankruptcy
remote subsidiary of FSII included in the Company’s consolidated
financial statements. The parties have entered into an agreement
to transfer, on a revolving basis, an undivided percentage ownership
interest in a designated pool of accounts receivable up to a
maximum amount based on a defined calculated percentage of the
outstanding accounts receivable balance. As collections reduce
accounts receivable included in the pool, new receivables are
sold into the pool. During 2002 and 2001, the Company collected
and reinvested, on a revolving basis, approximately $226 million
and $812 million of receivables, respectively. The special purpose
subsidiary has the risk of credit loss on the receivables and,
accordingly, the full amount of the allowance for doubtful accounts
has been retained in the Company’s balance sheet. Under
the terms of the Receivables Securitization, FSII retains collection
and administrative responsibilities for the receivables in the
pool. Due to the short-term nature of the receivables, the Company’s
retained interest in the pool during the year is valued at historical
cost which approximates fair value. The effective interest rate
is approximately one month LIBOR plus an annual commitment fee
of 50 basis points. The Company recorded $1.8 million, $3.8
million and $3.9 million of losses on the sale of receivables
as interest expense during the years ended December 31, 2002,
2001 and 2000, respectively. The full amount of the Receivables
Securitization facility was available at December 31, 2002 and
2001 and was replaced in January 2003. (See Note 23–Subsequent
Events.) |
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